Disinflation in the 1980s Was a Result Of

question 184

Multiple Choice

Disinflation in the 1980s was a result of:

• A) leftward shifts in the aggregate demand curve due to money supply reductions.
• B) leftward shifts in the aggregate supply curve due to sticky wages and prices.
• C) leftward shifts in the LRAS curve due to negative real shocks.
• D) rightward shifts in the LRAS curve due to positive real shocks.

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Definitions:

Investment-Grade Bond

A bond with a high credit rating, indicating lower risk of default, making it an attractive investment option for conservative investors.

Junk Bond

A high-yield bond with a lower credit rating than investment-grade bonds, reflecting higher risk.

Annual Interest

Interest calculated or paid once per year on a loan or investment, based on the initial principal or on the amount outstanding.

Call Provision

A provision in a bond or similar fixed-income instrument that permits the issuer to pay off the principal ahead of its maturity date.